Can I claim tax relief on my finance payments?

Yes, you can claim tax relief on the interest of any amounts you pay as part of a finance agreement.

Many mechanics and other vehicle technicians purchase tools and equipment for work use through a finance agreement. The tax office allows you to claim tax relief on the interest portion of your payments. The relief is available to both employed and self employed tax payers.

A claim for tax relief on the interest part of your finance payments can be made at the same time as tool tax rebate claim or separately.

What type of purchases does this finance payments tax relief apply to?

Tax relief on finance payments usually applies to purchases that are eligible for a capital allowances claim like a tool box. These types of finance agreements are usually offered by large suppliers like Snap on and MAC Tools.

Can I claim tax relief on finance payments’ interest for dual purpose items?

Yes, for dual purpose items, you can claim a proportional amount of tax relief, based on the percentage of business usage.

What evidence do I need to support my finance payments tax relief claim?

You will need to send HMRC financial agreement documents as evidence to support your tax relief claim. Your tool provider should provide you with a finance agreement which is all you need.

Is there a deadline for submitting a finance payments tax relief claim?

A tax relief claim for finance payments can be backdated for four tax years, after which any refund will not be paid. You have four years to submit your finance payments tax relief claim before you lose your money.